Contactless Functions Add Great Value to Smart Card Market

Oyster Bay, New York - 11 Jan 2011

The latest market data from ABI Research shows that the market for smart cards and secure ICs grew to record levels in 2010, and is forecast to grow even further in 2011. The milestone of six billion ICs was passed for the first time last year as manufacturers bounced back from a poor 2009, recording growth of over 20% to meet demand for the 5.9 billion smart cards that shipped. Driving this growth was the SIM card market which reached the shipment landmark of 4 billion units for the first time.

These are not the only milestones: in terms of value, the IC market returned to the $2 billion level after a significant decline in 2009 when it fell to $1.7 billion. This growth is a result of higher volumes and a slower decline in average selling price (ASP) as well as strong growth in higher value verticals and a greater requirement for higher-level features, such as contactless and multiple application capabilities.
 
Smart cards employing a contactless interface made up a little over 10% of the total. Practice director John Devlin, says, “One might expect contactless to account for a higher percentage, but we must remember that SIM cards, which have not yet seen any significant contactless rollout, account for the majority of shipments.”
 
Devlin continues, “In the payment and banking sector, 2010 shipment volumes grew 15% and in the coming year they are forecast to expand even faster, comfortably exceeding the milestone of 1 billion units for the first time. We are also seeing more demand for EMV-compliant cards with advanced DDA (Dynamic Data Authentication) capability, new products meeting higher level Common Criteria security standards and greater issuance of contactless solutions.”
 
ABI Research’s Smart Card Market Data study includes estimates for the installed base and the annual shipments volumes of smart cards and smart card ICs, as well as tracking the ASP and the resultant revenues. Data are broken out for each of the main vertical smart card applications, for product type and interface, and by region. For the first time, this product segments contactless cards and ICs into those which are purely contactless, and those which are dual-interface.
 
 
ABI Research provides in-depth analysis and quantitative forecasting of trends in global connectivity and other emerging technologies. From offices in North America, Europe and Asia, ABI Research’s worldwide team of experts advises thousands of decision makers through 29 research and advisory services. Est. 1990. For more information visit www.abiresearch.com, or call +1.516.624.2500.

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